G20 Summit & the Likely New Delhi Declaration

What’s in Today’s Article?

• Why in News?
• About G20
• Historical Background of G20
• Working of G20
• News Summary

Why in News?

• India, as part of its G20 presidency, is working to evolve a consensus on a range of contentious issues even if that means stepping back on many of its stated position.

About G20:

• The G20 is an intergovernmental forum comprising 19 countries and the European Union, established in 1999.
• Objective: To address major issues related to the global economy, such as international financial stability, climate change mitigation, and sustainable development.
• Its members account for more than 80% of world’s GDP, 75% of global trade and 60% of the population of the planet.

Historical Background of G20:

• The Group owes its origin to the Financial Crisis in 1997-98 of the Asian Tigers(Countries of East and Southeast Asia), which caused its establishment in  
• It worked first as a forum for the Central Bank Governors and Finance Ministers of the major industrialised and developing economies to discuss global economic and financial stability.
• Elevation to Leader’s Level: 
  • After the 2008 global financial crisis, it was upgraded to the level of Heads of State or Government when it became clear that crisis coordination would be possible only at the highest political level.
• In 2009, it was declared as the “premier forum for international economic cooperation”.
• The G20 Leaders have met on a regular basis since then, and the G20 has emerged as the leading platform for global economic cooperation.

Working of G20:

• A yearly Summit is held with the participation of the respective Heads of State and Government.
• The Finance Track comprises all meetings with G20 finance ministers and central bank governors and their deputies.
• The Sherpa Track focuses on broader issues such as political engagement, anti-corruption, development, energy, etc.
  • Each G20 country is represented by its Sherpa who plans, guides, implements, etc. on behalf of the leader of their respective country.
  • Currently, India’s Sherpa for G20 is Shri Amitabh Kant.
• The presidency of the G20 rotates every year among members, and the country holding the presidency, together with the previous and next presidency-holder, forms the ‘Troika’ to ensure continuity of the G20 agenda.

News Summary:

• India, as part of its G20 presidency, is working to evolve a consensus on a range of contentious issues even if that means stepping back on many of its stated position.
• For example, recently, the International Monetary Fund (IMF) and the Financial Stability Board (FSB), released a policy paper, at the request of the Indian G20 Presidency, which had recommended against an outright ban on crypto-assets.
  • Instead, the paper suggested introducing a licensing regime for crypto-asset platforms bringing the asset under the fold of anti-money laundering and counter-terrorist financing standards.
• Apart from cryptocurrencies, during the various finance track meetings, India has tried to accommodate differing views on issues like climate change and financing for developing nations.
• On the issue of enhanced capital requirements for multilateral development banks (MDBs), some countries have expressed apprehension over the issue of their financial commitment.
• However, India, along with US support, has assuaged these concerns pushing for greater leveraging of MDB capital to enable these institutions face emerging challenges including climate change and digital public infrastructure.
• The Sherpas of the G20 countries were in Manesar, Haryana over the last three days, and their action will move to Delhi for the leaders’ summit today (September 9) as they work on coming up with a joint communique so that the leaders’ summit can produce a declaration.
  • India’s G20 Sherpa Amitabh Kant said that there will be a New Delhi leaders’ declaration with India setting itself up as the voice of the Global South.
  • ‘Global South’ is just the opposite of ‘Global North’, defined essentially by an economic division between the rich and poorer countries.
  • It includes countries that are in Asia, Africa and South America.

Q1) What was the cause of the Korean financial crisis in 1997?

Based on their review of the crisis and policies, they suggest that the primary factors causing the 1997 crisis were structural weaknesses—notably a weak financial sector with limited ability to assess risk and an over-leveraged corporate sector with insufficient attention to profitability.

Q2) When was the African Union established?

The African Union is a continental union consisting of 55 member states located on the continent of Africa. The AU was announced in the Sirte Declaration in Sirte, Libya, on 9 September 1999, calling for the establishment of the African Union.

Source: Crypto to climate: Delhi takes step back to move forward, get consensus